Facebook announces positive Q1 2015 results, but shares still drop

In the first quarter of 2015, Facebook has increased its overall number of users, the number of monthly active users, increased the number of people accessing the site via smartphone and increased its revenue. All in all, pretty good then.

"This was a strong start to the year," said founder and chief executive Mark Zuckerberg in a statement.

Indeed, it was. The social networking giant said profit in the first three months of 2015 was $512 million (£341 million), a decline of 20 per cent from a 2014, but revenue increased by 42 per cent, to $3.5 billion (£2.33 billion).

Monthly active users have increased by 13 per cent compared to a year earlier, meaning Facebook now has 1.44 billion monthly active users.

When it comes to the younger audience accessing the site via smartphones, that percentage has also increased by 24 per cent, to 1.25 billion. That also means more money.

The social networking giant said mobile advertising represented approximately 73 per cent of advertising revenue, up from approximately 59 per cent for the same period last year.

Revenue growth is slowing, though, and at the same time research and development costs are going up, which has left some investors shaking their heads in worry.

Research and development expenditures more than doubled to $566 million (£377 million) from $181 million (£121 million) a year earlier. Facebook announced these costs will go even higher, as it looks to expand some of its acquisitions including photo-sharing site Instagram, messaging service WhatsApp, and virtual reality firm Oculus Rift.

Investors’ fears had Facebook’s shares drop more than two per cent in after-hours trading.